The largest part of America’s wealth is derived from family-owned businesses. They comprise between 80% and 90% of all enterprises in North America.
While family businesses are a very important part of the American economy, it’s rare for them to last longer than a couple of generations. In fact, fewer than 15% make it to the third generation, and only about 3% survive until the fourth generation takes the reigns.
At Velvet Ice Cream, we take our position as a fourth-generation family-owned business very seriously. As we embark on our 105th anniversary, we want to share tips that have helped make Velvet so successful.
1. Maintain family legacy
In 1914, Joseph Dager launched Velvet Ice Cream in a Utica, Ohio, confectionary. The second-generation took over in 1960, expanded the company and moved production to Ye Olde Mill. Ten years later, the mill opened to the public, and it has since become a major tourism destination, attracting more than 150,000 visitors every year and being ranked by Fodor’s as one of the nation’s top 10 ice cream factory tours.
It’s possible to maintain longstanding brand values and even ramp them up for a new generation of consumers. Our company has always valued bringing people together and the role our ice cream plays in that togetherness. Our mill brings that concept to a new generation with our ice cream parlor, factory tours, tastings and spaces for family gatherings.
2. Prioritize customer connection
As customers’ relationships with brands grow, they harness a deeper emotional connection with the brand. A fully connected customer is 52% more valuable than one who’s happily engaged with the brand, but not fully connected.
Velvet was way ahead of its time in linking customers to our brand. We were early adopters of sharing our legacy and story with customers and creating positive face-to-face connections and experiences at our factory at Ye Olde Mill. One of the world’s top shoe brands built Nike Town. Hershey launched a theme park. Disney created international experiences. And nearly 50 years ago, my father and uncle opened Ye Olde Mill as a family destination.
3. Stay relevant
It’s rare for a company like ours to sustain business for more than 100 years. It’s even rarer for it to grow.
Since my father turned over the company to my sister and me nine years ago, we’ve plotted a course for controlled but steady growth. We have increased revenue from $25 million in 2009 to more than $30 million today. We underwent a major expansion in 2016, adding a state-of-the-art cold storage facility that dramatically increases our capacity, setting us up for further growth.
As a legacy brand, we must balance our history with staying relevant for today’s — and tomorrow’s — customers. The marketplace is never stagnant. We must stay true to recipes and core values, yet fresh for the next generation of customers. We do not chase fad foods, but rather rely on a legacy of quality, holding onto what people love while thoughtfully introducing exciting experimental flavors locally first.
4. Balance family and business
As a team, we agreed to require family members to work elsewhere before joining Velvet. This not only helps with our personal development, but also allows our company to gain new perspectives.
We also have had a Family Code of Conduct set in place for multiple generations. This code outlines business values and helps prevent conflict. A family counselor experienced in succession planning helped us define roles and remove emotions from important business decisions.
5. Promote local pride
We are an Ohio-based company that prides itself on supporting our local agriculture and the dairy industry nationally whenever possible. We’re an Ohio Proud member, which really matters to our regional grocery partners. On average, 75% of customers worldwide say that a brand’s origin is as important as — or more important than — nine other purchasing drivers, including selection, price, function and quality.
With the accelerating changes in our industry — and the U.S. business climate overall — it becomes more important than ever to seek out and cling to legacies consumers love and trust, while being visionary and flexible enough to respond to change. That blend is a proven recipe for expanding into new markets while securing relationships with our most loyal existing customers.